Ballard Power Systems Inc. (BLDP) Earnings Call Transcript & Summary

Good morning, everyone, or good afternoon, wherever you are in the world today. Welcome to everybody for our first ever virtual Investor and Analyst Day. These are extraordinary times, and we want to thank you for joining us, even if we cannot meet in person. My name is Tony Guglielmin, and I'm the Chief Financial Officer at Ballard Power Systems. It's been 3 years since we last hosted an Investor and Analyst Day, and we expect today and hope today will be very informative and highly productive for all of you. I will review the agenda in just a minute. But before that, a few housekeeping notes. With our virtual format today, we have included several Q&A periods over the course of the day. You will be able to submit any questions in written form by sending e-mails to analystday@ballard.com, and we will do our best to respond to questions during the event. If we're unable to get to your question, we'll get back to you over the next several days. We'll also be patching in a number of people into today's proceedings via video from remote locations. These include several Ballard executive members in Europe and Asia as well as distinguished panel members located today in Europe and North America, including Dr. Ken DeWoskin, Senior Advisor to Deloitte; Dr. David Hart, Director of E4tech; and Bernd Heid, Senior Partner with McKinsey & Company. We look forward to hearing from these gentlemen a little later in today's agenda. Lastly, video, along with all of the slides, will be available in the Investor portion of our website in the next day or so. So with that, a brief word on the agenda that you see on your screen. In addition to our distinguished panel members, we have a number of Ballard presenters, all of whom I'll introduce over the course of the day. With the unprecedented investor interest in hydrogen and fuel cells, our lineup on the Ballard subject matter experts will be addressing a number of key areas, including our strategic direction, our corporate growth platforms, progress in key target applications by geography, our product development road map, our cost reduction strategy, an operations update, comments on our approach to ESG and, finally, on financial review. And then Randy will wrap up at the end of the day. Today's agenda is to provide a deep dive into our plans to provide for scaling of our business and moving forward to profitability. Today's speakers are people that are ideally suited to provide you with plans, insight and context. And I hope you'll find all the presentations and discussions interesting and informative. We expect today's Investor and Analyst Day agenda to take about 5 hours without any formal breaks. So please note that a video of today's proceedings, presentation material as well as all the bios of speakers will be available for download from the Investors section of our website at www.ballard.com in the event you're not able to listen for any portion of the proceedings. And lastly, I would just like to point out the usual safe harbor statement that applies to all of the information we'll be providing during the course of today's event. So let's get started. Our first speaker today is Randy MacEwen, Ballard's President and CEO. Randy became President and CEO of Ballard in October 2014. And Randy is going to provide a brief review of Ballard's corporate strategy and investment thesis. Randy?

Thanks, Tony, and good morning from Vancouver. I'd like to personally extend my warm wishes to you to join Ballard's Investor and Analyst Day 2020. We have an exciting agenda lined up for you and with the objective of providing better understanding and increased transparency on Ballard's business. And I'm particularly proud that we have the opportunity today for you to hear from the Ballard's leadership team. Every day, they inspire me with their commitment to customer obsession, safety, integrity and innovation. Like many members of the Ballard global team, I've been in the industry for a long time. In fact, first started getting exposure in the industry about 24 years ago. Now a lot has changed in the past 24 years, indeed over the past 24 months. And we want to share much of this with you, but your time today, in my opinion, understanding the Ballard's story and the interest in the hydrogen and fuel cell community is well-founded based on where we are today. Now there are 7 key factors that are impacting the hydrogen fuel cell sector. First, we have extraordinary policy changes that have happened literally over the last 2 years. We now have some 70 countries that are looking at decarbonizing and going to net-zero carbon by 2050. 20 of those countries are focused on hydrogen strategies and road maps that will form a key plank in their decarbonization plants. And there's increasing policies around not just addressing climate change, but air quality as well. We're seeing policies in Europe -- throughout Europe, including at the national and at city levels as well as in countries like China, South Korea, Japan and a lot of policy recently coming out of California. So -- and I'm going to come back to this in a minute. Secondly, we have a growing number of vehicle deployments. And only a few years ago, the number of vehicles on road was relatively de minimis. But today, we have, really, for the first time, scaled adoption occurring the first signs of it in buses, commercial trucks, passenger cars and forklifts. Now we're at the first second of a 24-hour day in terms of market adoption. So there's a lot of work to do. But what's happened with these initial deployments is that the discussion has transitioned away from, does the technology work? We've proven it works as an industry. Discussion really now is about how do we improve the economic value proposition and drive down the cost. Now speaking of value proposition, a third key point is the fact that there's -- I would suggest universal consensus now that the area where fuel cells offer the strongest value proposition are in medium- and heavy-duty motive applications, bus, truck, rail and marine. We're also seeing that the cost of renewables, which have plunged about 80% over the last decade are now paving a pathway for low-cost production of green hydrogen. And we're seeing, for the first time, credible reports that are providing pathways for competitive TCOs, total cost of ownership models, for fuel cell electric vehicles, not just against battery electric vehicles, but also incumbent legacy technology. And we've seen a sea change for corporate investments over the last, really, 2 years. In August of 2018, Weichai and Ballard announced its formative transaction with joining -- creating a joint venture in China with Weichai also investing in Ballard. Since that time, it's been dominoes with a number of players, mobility giants and energy majors moving into hydrogen and fuel cell technology. And finally -- and I think this one is underreported and underappreciated, it's really the ESG investment theme. And what's happening, of course, are investors are reassessing risk and they're transitioning out of carbon-intensive investments into investments that offer lower risk and lower exposure to carbon and, in many cases, also have a social mandate as part of their businesses. So this investment theme, I think, is critically important in terms of capital. Now I want to punctuate this point about policy change over the last 2 years. We are increasingly becoming a CO2-regulated world. And the policy changes we're seeing are not just focused on decarbonization, but they're focused on hydrogen across a number of different sectors, whether you're looking at the production of steel, whether you're looking at mobility, whether you're looking at energy overall. And this policy changes that are favoring hydrogen deployments has never been seen before. So we're now seeing hundreds of billions. Hundreds of billions of dollars being committed to decarbonize using green hydrogen and fuel cells in a variety of applications. Now this policy landscape that we see is the context for Ballard's vision. And our vision is to deliver fuel cell power for a sustainable planet and has been remarkably durable over our 40-year history at Ballard. And this vision inspires our team and gets them fired up every day to not only improve our business and decarbonize mobility, but pass on to the next generation a more sustainable planet. Now Ballard's vision is complemented by our mission. Our mission really addresses the 4 key stakeholder groups: our customers, employees, shareholders and society at large. And for customers, we use our fuel cell expertise to deliver valuable and innovative solutions to our customers globally. Now this is a recognition of the core competencies of Ballard on PEM fuel cell capabilities. Secondly, it's a point that we want to not only provide valuable solutions, but innovative solutions and also a recognition that we're selling and providing products globally. Second is our employee base. And here, we're creating rewarding opportunities for our employees. And our team members are really focused on what we call our employee value proposition, and Jan will be sharing with you later today more about Ballard's employee value proposition. Third is providing extraordinary value to our shareholders. And here, I think, certainly we're looking to provide outsized returns. And finally, and this is an important one, we believe. It's the -- I would say not just the role we have in decarbonizing, but the duty we have at Ballard. And that duty is to deliver fuel cell power to help support the transition to a hydrogen society. Now we frequently get the question, why are you focused on the medium- and heavy-duty motive applications, bus, truck, rail and marine? And there are 3 key reasons for that. First is that the value proposition for fuel cells is strongest in these applications. And I want to make a very important point here is that battery electric technology and fuel cell electric technology, these different pathways of electrification are highly complementary. So where you have light-duty vehicles that have short-range requirements, that have relatively low utilization, have lots of opportunity for recharging, battery electric is quite compelling. Where you have heavier vehicles, with higher utilization, with higher range requirements and a need for fast refueling, fuel cell electrification is very compelling. And so at Ballard, we're focused on these use cases where the value proposition for fuel cell technology is strongest. Second is that many of these use cases in medium- and heavy-duty motive offer the need for centralized or depot refueling. So think about city buses, transit buses that return back to base at night to get washed and refueled or fleets of commercial trucks that come back to a base or a train that comes back to a rail station or a marine vessel that comes back to port, here you have the opportunity for centralized depot refueling. That means you do not need to have a distributed refueling infrastructure. So it's a lower barrier to entry on the refueling infrastructure side and also better economics on your fueling capability and infrastructure. And third, and this is really important to Ballard is that these applications disproportionately contribute to emissions and to date have been extraordinarily difficult to abate. So think about, for example, in the U.S., 10% of all on-road vehicles are buses and commercial trucks, yet they disproportionately contribute 1/3 of GHG and a whopping 2/3 of NOx in PM2.5. So we're focused on these market segments that we're going to add a lot of value in terms of decarbonizing heavy- and medium-duty motive applications. Now there were 2 important reports that came out earlier this year in January. I want to highlight these reports for a minute because what they do is demonstrate, in my opinion, for the first time, this credible pathway towards TCOs, that are our total cost of ownerships, that are competitive with not just battery technology but incumbent technology as well. And so the first report was jointly prepared and published by Deloitte and Ballard in January, entitled fueling the future of mobility. And the second report, path to hydrogen competitiveness prepared for the Hydrogen Council by McKinsey. Both these reports are on our website and what they describe is the pathway for fuel cell electric vehicles to be cost competitive in a variety of use cases and applications over the next decade. And we have, fortunately, the leader from Deloitte and the leader from McKinsey, respectively, on our panel today to take some questions on these reports as well. Now we provide this slide in the slide deck, and I'm not going to comment too much on it, but it does provide you with a snapshot of Ballard today with a number of key metrics. But what I did want to do is recognize in the top right-hand corner here the 4 strategic investors we have at Ballard, Weichai, Nisshinbo, Anglo American Platinum and Broad Ocean. And we want to thank them for their support, for their confidence and for their partnership. Now I'd like to talk a little bit about Ballard's strategy. And we articulate this as our e12345 strategy. Now e represents engaging the e-mobility ecosystem. It's a recognition that we cannot do this alone. We have to engage the entire supply chain, the entire value chain and ecosystem in order to drive the adoption and accelerate the adoption of fuel cell electric vehicles by simplifying fuel cell vehicles for customers and driving down the cost. And here, there's a lot of work to do at Ballard in the -- with the industry, and we're -- we'll talk a bit about this going forward today. Now 1 of e12345 is that we will continue with Ballard to be #1 in PEM fuel cell technology for these medium- and heavy-duty motive applications. So we continue to invest in research, in technology development, in product development, in customer experience. So they were not just the leaders today and 10 months from now, but 5 and 10 years from now. So very important for us to maintain that leadership position. 2 of e12345 are the 2 growth platforms we have. Here is Power Products, where we design, manufacture and market our PEM fuel cell products. And secondly, Technology Solutions where, here, we have customers that may have fuel cell ambitions, but don't necessarily have in-house fuel cell competencies and capabilities. So we support those customers and their dreams. And both of these platforms are highly cross leverageable. 3 of e12345 are the 3 key geographic markets, China, the European theater and California. And 4 and this one is critically important. This is the 4 parts of the value chain that Ballard participates in. And we've been doing this not just for 6 months or 6 years, but for 25-plus years at Ballard. And so this is really about designing and manufacturing fuel cell engines for end markets, bus, truck, rail and marine, as we'll talk about the passenger car market as well. Inside of those fuel cell engines, you have fuel cell stacks as well as balance of plant components. The balance of plant components, we specify and procure from third parties with full design and control strategies for that module. But that stack, inside of those fuel cell engines, critically important. And the stack is comprised of unit cells, which have MEAs, membrane electrode assemblies, and bipolar plates. And at Ballard, we understand the material science and the design of MEAs. We're looking at membranes, gas diffusion layers, catalysts, ionomers, how you process and seal those MEAs and manufacture them in scale. How those MEAs are then paired up with bipolar plates and the serpentine design of those plates for flow fields. How you're pushing oxygen and hydrogen and water through a different temperatures and pressure and operating conditions and then taking that -- those MEAs and plates under compression hardware, putting that stack inside of an engine with these balance of plant components, having them work in the field in different climatic conditions and duty cycles and road conditions? Ballard is expert at this. And that's because we're in these different parts of the value chain. And this -- being in these different parts of the value chain also enable us to compress costs. And of course, as we're servicing these modules in the field and getting back data every day, every week, every month, every quarter, that's informing our product development for the next generation. Of course, today, we're on generation 8 of our fuel cell engine and generation 13 of our fuel cell stack. So this vertical integration is critically important to Ballard's strategy. And 5 of e12345 are the 5 key applications we focus on. 4 of them, being the medium- and heavy-duty motive applications of bus, truck, rail and marine, and the fifth one, the passenger car market, a longer-term market where we see lots of embedded optionality. And I think what's important to understand here is that the same core competencies, the same technology and, in fact, in many cases, the same products or significant portion of the bill of materials of products are being leveraged across these different market opportunities. So multiple shots on goal with our strategy. Now before I get into our sustainable competitive advantages, there's a major event that happened yesterday, I want to share with you a major announcement at Ballard that enhances our sustainable competitive advantage. First, we announced yesterday an important strategic collaboration with MAHLE. Now we'd previously indicated, we're working on a comprehensive strategic collaboration with a major Tier 1 supplier based in Europe for the commercial truck market. And the announcement yesterday was really the culmination of about a year's worth of work in terms of discussion, diligence, technical collaboration and scoping. So we're thrilled to be partnering with MAHLE, a company that celebrates this year its 100th anniversary. They, in 2019, had 77,000 employees, 160 production locations and 16 research and development centers and the annual sales last year of around EUR 12 billion. MAHLE's commercial vehicle division supplies a broad range of products to truck OEMs. And MAHLE components are present in half of the world's vehicles on the road. Let me repeat that. This is important. MAHLE components are present in half of all of the vehicles on the world's roads today. Now MAHLE has been a serious supplier for fuel cell vehicles for over a decade, including air intake systems and air filter solutions. They're now focused on the development of a variety of balance of plant components for fuel cell modules. Ballard and MAHLE are bringing together complementary skills and experience to develop, industrialize and cost reduce fuel cell engines for commercial trucks, initially focused in Europe. Now Ballard has prime responsibility for system design and fuel cell stack subsystem, while MAHLE has prime responsibility for balance of plant components, thermal management, power electronics and systems assembly. Now we expect to finalize definitive agreements in 2020. We believe MAHLE adds a second main pillar to our industrialization strategy along with Weichai and puts us in a very strong position for growth as the European truck market takes shapes to meet the 2025 and 2030 CO2 emission reduction standards and as California prepares for 2024 clean truck standards. Now this is a long-term relationship that we're intending with MAHLE. And we plan to provide updates over the coming quarters and coming years on the progress and as our relationship evolves and takes additional shape. Now I often get the question, what are the sustainable competitive advantages from Ballard? You're in a leadership position today, but what about 5 years from now and 10 years from now, particularly as these markets really start to scale? And so I think as you listen to the presentations today, there are 7 sustainable competitive advantages we have at Ballard that are filtered through the presentations today and threaded through. First, we have world-class talent and expertise. Our people are our strength at Ballard. Second, we have leading PEM fuel cell technology. Third, we have a comprehensive product portfolio. And as you'll hear, we're doing great things to increase that product portfolio and push costs down. Next is the vertical integration I just described. And we have unparalleled field experience with 50 million kilometers of on-road field experience in these heavy-duty motive applications to date. We have an extraordinary list of roster of blue-chip customers with a lot of customer stickiness. And at Ballard, we believe we have a very powerful brand. In fact, we believe the Ballard brand is the gold standard in the PEM fuel cell industry for durability, performance and reliability. And finally, I'd like to ask you, as you're listening to the presentations today, to keep in mind these 10 strategic priorities that Ballard is focused on. So delivering outstanding customer experience; investing in our leading fuel cell technology and products; a very aggressive drive on product cost reduction, I'm excited you'll hear about today; forging key industrialization partnerships, including executing now going forward on the Weichai-Ballard joint venture on the MAHLE partnership; investing in advanced manufacturing capacity expansion and there's a very exciting update on that front today; growing our local presence in key markets; and continue to be, at Ballard, a great place to work and we're really excited about not just growing a sustainable organization, but doing in a way that also has ESG responsibility; and as Tony will talk a little bit about later, driving improved financial performance at Ballard, scaling revenue, getting gross margin expansion, getting leverage off of our cost structure, moving to profitability and doing all that with a very sound balance sheet; and finally, pursuing complementary M&A opportunities. Now on this last one, we haven't dedicated time today to talking about our M&A strategy and screening criteria, just given time restrictions. However, we do expect in an upcoming investor call to share more about our M&A strategy. So with that, I think you'll find the presentations today not only exciting, but highly informative. And again, our objective is to provide an increased understanding of our business and transparency. And with that, I'll turn it back to Tony.

Great. Thanks very much, Randy. So we're now going to turn and focus on our 2 key growth platforms that Randy mentioned a few minutes ago, beginning with Power Products. And this will include a discussion of total addressable markets and the value proposition for Ballard's heavy- and medium-duty motive applications. First up is Rob Campbell, our Chief Commercial Officer, who will speak to our Power Products platform. Rob joined Ballard as Chief Commercial Officer in 2017. Rob has extensive experience in global business development in China, Japan, India, Europe and the U.S. and has deep experience in the clean energy space, including the solar industry and the fuel cell and electrolyzer sectors having at one-time been Hydrogenics EVP of Sales and Marketing. Rob, over to you.

Thank you, Tony. It's great to speak to you today, even virtually. We've been very busy since our last Investor Day in 2017, where I outlined our Power Product strategy and focus on Heavy-Duty Motive as the leading market application for our transition to a zero-emission world. Today, I'll provide an update on our progress as well as more details on our markets and, most importantly, why Ballard is winning in these markets. Now just as a bit of context, as Randy mentioned, we use PEM fuel cell technology to deliver power bus, truck, marine and rail. And we will show you why Ballard will continue to lead in this technology. And because it's most effective in terms of coordinating the heavy-duty fleets and vehicles with fueling infrastructure for the initial entry into the zero-emission market. But first, let's check in on how PEM fuel cells are doing in the marketplace in order to help reinforce our beliefs. Now as reported by E4tech, and I'm sure more to follow from Dr. David Hart of E4tech here with us today on this, we are seeing significant scaling of PEM fuel cells with an historic CAGR of 30% and a market share within the fuel cell family of technologies of approximately 80%. This scaling is driving major investments, resulting in substantial cost reductions. More on this later on exactly what Ballard is doing, so please be patient for Kevin and Lee's presentations. PEM has been, is and will be the dominant fuel cell technology in the market for mobility. And as PEM clearly outdistances all other technologies, PEM fuel cell technology is also at the core of Ballard's strengths. Our plans, as we shall see today, will keep us in a dominant position going forward. So with that bedrock foundation of leading PEM fuel cell technology, we are going to now walk through how real and how relevant our Heavy-Duty Motive strategy is today and will be in the future to deliver important sustainable results. I am going to focus my comments on our key applications as outlined by Randy, bus, truck, rail and marine. We will hear afterwards how these applications are doing in our key regions, China, Europe and California. First, I want to quickly summarize some of our key milestones since 2017, New York City event, to underscore the tangible progress Ballard has made and progress that continues to set the stage for our future sustained success. We start with this Class 8 project with Kenworth, a drayage truck, active in the Port of Los Angeles today. Over to France, this is the first bus rapid transit project with Van Hool. Looks futuristic, but you can actually ride this bus today. Early engagement in Marine -- just get these buttons working -- with a partnership with ABB, a brand-new market for Ballard. A purpose-built zero-emission train with Siemens, more on this later from our European team. Okay. Just bear with me. The largest fuel cell truck fleet in the world, Alfred will give us a complete update on China in his presentation. Our 13th generation of stack. This is the development of vast experience, both in-house and on the road. And keep the -- and this is of containers -- keep those containers moving at the port of L.A. with this capacity fuel cell yard truck. And keep those packages moving with UPS, more important than ever with COVID. Okay. And you know something is happening when the largest fuel cell -- diesel engine company in China and also the largest fuel cell engine company in the future gets involved with fuel cell technology. Thank you, Weichai. Rail projects in the U.K., a great opportunity to retrofit the existing fleet with Porterbrook. The launch of our latest technology, FCmove, and we'll hear much more about this as we go forward. In the market, Marine moves quickly. We jump in with both feet and form on Marine Center of Excellence in Europe. Here we have 64 tonnes of heavy-duty trucking in the heart of the Canadian oil patch, and they want more of the same, jump from 64 tonnes to 280 tonnes with this massive truck, working with Anglo American. Anglo American has a vision to transform the mining sector with sustainability. More zero-emission vehicle boats for Europe's canals and rivers. Fuel cells just make sense for this application. And more development with Norled with the world's first liquid hydrogen ferry. This will set the stage for larger ships in the future with the use of liquid hydrogen. A purpose-built truck -- sorry, a purpose-built bus with our latest FCmove technology. This bus is now on tour across Europe. Next stop, Paris. Wrightbus, a fantastic success story for Belfast and a true champion for fuel cell buses moving forward. Back to North America with New Flyer, tested to the Altoona gold standard for robustness, and they did it with Ballard. And finally, this month, the launch of FCwave, a special design product for marine, and the interest is super high for this new technology. How impressive was that? Thanks to a tremendous team effort by Ballard and in close collaboration with all of our customers. And look at the results in aggregate, thousands of buses and trucks and significant engagement in rail and marine. So you could ask, why are we winning with these customers? Why are we leading with these applications? Simply put, experience matters. 40-plus years dedicated to this business. Our proven experience allows our customers to be confident in their choice to work with Ballard. We were first to market with a heavy-duty strategy, and we had the experience, technology and products to confidently move forward. Now the market is accelerating as never before, and time is of the essence to address climate change and reduce pollution. Customers do not want to take technology risk with this transition, and they do not want to wait. Ballard is the clear choice for market adoption. Further proof points. We have products deployed in all climates, 50-plus million kilometers of real-world service, 670 megawatts of fuel cells produced and the longest lasting stacks on the planet. Simply put, we have you covered when it comes to bus, truck, rail and marine, zero-emission needs. Now as mentioned, Ballard's heavy-duty strategy plays to our technology strengths. These markets in heavy duty are also the first movers on our journey to zero-emission because they deliver maximum environmental benefits in terms of emission reductions. Medium- and heavy-duty trucks powered by diesel represent only 5% of the vehicles on the road that currently contribute more than 20% of transportation emissions as trucks are typically driven much greater distances than cars. Now heavy duty also enables maximum market adoption with fleets, creating attractive economics for fueling stations and fuel supply. And we are not alone in our beliefs in heavy duty. We now have the establishment of a robust and dynamic hydrogen industry and fuel cell industry focused on heavy duty with many leading players now totally endorsing our heavy-duty strategy. Bottom line, we are creating an industry that is changing the world of mobility to sustainability. And hot off the press, as Randy mentioned, we now welcome MAHLE as our collaboration partner. The part I really liked was the fact that 50% of all vehicles on the road in the world have MAHLE products in them, a fantastic partner for Ballard to work with. New players are good for the hydrogen industry supply chain. And by the way, competition only makes Ballard stronger. We welcome all the new participants to our journey. We have the power to change the world. Now let's touch on macro trends in the industry. On the engine side, we now see that hydrogen fuel cells are clearly recognized as a viable contributor in the rapidly transitioning world to zero-emission. And talking to a key customer just last week, one who's been in the engine business for decades, and I quote, "We are seeing the end of combustion happening, and we are fully on board to transition to electrification." And that means fuel cells, when it comes to heavy duty. And did you see the recent news from Europe regarding acceleration of CO2 reductions? Very bold, very needed. And how about the U.K. and California? Looking to bring forward their plans to eliminate internal combustion engines by next decade, a major acceleration. The pendulum is in full swing to zero-emission vehicles, ladies and gentlemen. And on the battery side, batteries have enabled the first wave of electrification and, of course, will play a major role. However, as with all technologies, there are pluses and minuses, and we are seeing more questions today about the geopolitics of commodities, the issues of recycling batteries and the question about how to enable more renewables while also ensuring critical grid stability, not to mention range limitations, of course, in heavy-duty applications. We have our challenges, too. Our classic, where do you get the hydrogen? And now what color is that hydrogen? In this case, green or blue with carbon sequestration, both are emerging as very attractive options. It does, however, take sustained and significant investment to build out the infrastructure, and it is great to see the green recovery endorsement of green hydrogen in so many jurisdictions around the world. Now against that macro backdrop, we can drill down into what our customers are saying and why they are selecting heavy-duty fuel cells for their application. All-weather performance is one aspect. Case in point is SunLine Transit in California. They operate fuel cell electric buses in 100-plus degree Fahrenheit weather, which is tough on batteries. At the other end of the spectrum is cold weather, which is also very limiting for battery electric operation in the wintertime. Payload is another great example. Kenworth provided the following analysis based on recent work done. In one day, regional trucks haul -- drive a distance of approximately 350 miles. A battery-only truck requires 900-kilowatt hours of energy to deliver that range and weighs an extra 16,000 pounds to 17,000 pounds, which is equivalent to approximately 5 or 6 cars. Think of it. You have to put 5, 6 cars on the truck before you can actually put any of your payload on the truck. So that is quite a reduction and, in fact, it reduces payload by 30%. The fuel cell version of that truck has no material change to the payload compared to diesel. And finally, refueling time. In our experience, our transit authorities are recharging their fuel cell electric buses in 5 to 10 minutes compared to several hours for the battery electric version without the addition of expensive superchargers or demand spikes on the grid. Having quick refueling with hydrogen translates to fewer vehicles needed and no grid impact. And in many recent transit studies, this is a significant benefit. Bottom line, only fuel cell vehicles can directly replace diesel route-for-route on a one-by-one basis. And looking at infrastructure. Of course, infrastructure questions become very significant when looking at large-scale adoption. We need cost-effective solutions for the complete ecosystem. Hydrogen's role as a cost-effective solution is now better understood and recognized more than ever before with the deployment of larger and larger fueling stations around the world. We will discuss a foothill transit report during Nicolas' California presentation where hydrogen at scale is shown to be more cost-effective than electric charging, another important proof point for hydrogen. Building out hydrogen capacity for heavy duty will also enable greater expansion of affordable fueling capacity for passenger cars, another added benefit. So let's reflect on all this and ask the question, how big is our market? Well, it's very big. Based on industry reports and our own analysis, we see an addressable market in 10 years at over $130 billion for fuel cell engines in our current target markets of China, Europe and North America, representing 1 million megawatts of fuel cells per year. That is correct, 1 million megawatts of production. This is a 1,000x growth opportunity from today. And we also have the off-road segment. This is also exciting upside potential, representing another 20-plus percent to our total addressable market, and we are excited to see major sustainable mining vehicle initiatives with Anglo American and Weichai as well as developments in excavators and construction equipment, as shown here with JCB. Further, we are active in backup power and distributed generation and are cultivating some very exciting strategic relationships for megawatt DG and backup power needed for such applications as large-scale data centers. Now let's understand how this transition will take place. Back to our 4 key mobility markets -- heavy-duty mobility markets. This report here from the Hydrogen Council highlighted bus, light commercial van -- vehicles and vans and rail, such as the tram project we did earlier with CRRC in the near term. With medium term for large trucks and commuter trains, such as the project we are working with Siemens on and longer-term time lines shown for marine and passenger cars. The blue triangles represent ambitious adoption scenarios. The white triangles represent business as usual or what we anticipate without acceleration. And this build-out we need to progressively expand our product offering in order to cover this range of application with the best, most commercially effective solutions. And this is exactly what we're doing. We are investing. Our goal is to be the best, the best in terms of performance, life cycle costs and also offer the most comprehensive range of PEM fuel cell products in the market so that we can provide the best solution for each of our served applications. And to do that, we need a complete family of stack technology, and this is exactly what we're doing. At the core, our fuel cell stacks, as mentioned, cross leverage all of our capabilities through our experience and through our in-depth knowledge of MEAs and bipolar plates, powering from a few kilowatts to megawatts of systems, meeting space, durability, performance and cost targets. First, our legacy 9SSL stack technology at the top. This is the workhorse of the industry, powering close to all fuel cell vehicles in China today. We will learn more from Alfred on this data point. In the middle, our latest LCS 13th generation of development stack technology, specifically designed for heavy-duty performance as required in applications such as bus. And recently announced at the bottom is our HPS stack, where higher power and power density are top priorities. This is the output of several years of development designed to exacting German automotive requirements. These stacks and future iterations provide Ballard with a complete family of solutions. Now let's see how this family of technology will help us address our core markets. We have 4 key product families focused on heavy-duty applications, each one utilizing one of our stacks, depending on the application and customer preference. So we have the legacy FCveloCity, which is with our 9SSL technology, FCmove which is our latest module using the LCS technology as well as FCwave, as I mentioned, purpose designed for the marine market, and also FCrail, which represents our evolving work with Siemens, which we expect to see on the tracks very soon. And finally, a late addition to our FCmove family, and this is our new FCmove, XD platform, specifically designed for larger trucks, such as Class 8 heavy-duty trucks. This platform is a top priority with demonstrations leading to planned series production. We are super excited to have joined forces with MAHLE for this platform, and we'll show further progress, as mentioned by Randy, on this exciting collaboration shortly. Again, with all our products, our objective is to bring the best technology and solutions to the market for all of our heavy-duty applications. And in this case, accelerate the introduction of affordable best-in-class series production large fuel cells so needed for the largest heavy-duty trucks. Let's turn to our addressable market time line. What are we looking at? How will this $130 billion market open up for Ballard? We started with buses. Buses are the anchor of Ballard's experience, and we lead in this application. We see the transit buses well underway and emerging activities with coach and intercity buses. This is a $14 billion addressable market, followed by trucks. Trucks have multiple applications. And we see with this a scaling from range extension applications to larger power, ultimately leading to long-range heavy-duty fuel cell trucks. This is the largest market segment we're going after. Hence, the large focus and priority Ballard is putting on this sector at $100 billion of addressable market, followed by rail. Rail, we have our initial projects such as CRRC in China with the tram, followed by passenger car -- sorry, passenger trains expected in Europe in the next year or so. This is a $4 billion addressable market. And finally, marine. Marine will take time to develop for the very large ships. It's worth the development cycle with an additional $13 billion of addressable market for a total of $130 billion. This happens over the next 5 years or so. It's dependent on many things, but it will be our focus. And we will drive the adoption as fast as we can. And in terms of driving that adoption, we have key levers for expansion. I've highlighted 4 key levers, and we just must look at the overall situation. First, we identified our markets. Second, we know what products are needed to address these markets. And now we're proceeding with laser focus to make everything happen based on these 4 elements I show here on the slide in order to underpin our sustainable growth and enable the full transition to a zero-emission world with mobility, but let's dig deeper again. Technology improvement. PEM fuel cells are Ballard's DNA, and we are driving further gains through continuous improvement in our core technology streams. We're also scaling while simultaneously innovating as we will shortly learn from Kevin. Our short-term scaling enables speed to market based on Ballard's proven technology. Our innovation keeps us in the lead for the long term. Product industrialization. We are driving costs down at record pace through industrialization. Our scaling and design improvements are tracking exceptionally well on cost for CapEx as well as OpEx, and we are rock-solid in our road map. Kevin and Lee, as mentioned, will show more on this important work. We are also intent on accelerating the market and are doubling down, as you have seen, on our core technologies. In addition, we have long recognized the importance of partners to complement our own skills and competencies, partners with industrialization skills as well and high-volume series manufacturing in key geographic markets as well as added channels to market. We have Weichai in 2018 and now MAHLE in 2020. We're privileged to be working together with such strong partners, [ Zhucheng ] Weichai, [indiscernible] MAHLE. This is very exciting. And when turning to application integration and ecosystem, again, we are intent on acceleration of the market with our partners, partners with application knowledge, to have a clear understanding of product requirements and performance goals that allow us to better integrate solutions. Thank you to all of our customers for your long-standing and strong support. And partners to help bring together the complete solution, renewable energy, hydrogen production, fuel distribution, fueling stations, vehicle supply and aftermarket service. As you can see, the chain -- the supply chain is long, and this has been a challenge in the past. We believe in a team effort to drive solutions here as the scale and scope are understandably very large and need a strong team to support it. And the good news is that new business models, such as H2Bus are underway -- well underway to provide total solutions that will help simplify and cost-reduce the complete process while also enabling much deeper integration of renewable energy into our economies. So let's sum up. The future is a bright Ballard blue. We have the proven technology, the experience and the team needed to deliver. We are leading with cost reduction and scaling. We are collaborating with the industry's best to accelerate the transition to a sustainable planet. We are Ballard. Thank you, and back to Tony.

Great. Thanks very much, Rob. Before I introduce our next speaker, just a quick reminder. [Operator Instructions] So in terms of our next speaker, I'd like to introduce Dr. Kevin Colbow. Kevin is our Chief Technology Officer. Kevin has been with Ballard since 1994 and has held a range of positions and responsibility in the technology areas before being named our CTO in March of 2019. Kevin is now going to provide an overview and update on our second growth platform, the Technology Solutions business. Kevin?

Thank you, Tony, and good morning. I am truly honored to have the opportunity to present to you today, first on Ballard's Technology Solutions growth platform and then again later today, on our product road map. I've been with Ballard for 26 years, and I'm excited now more than ever because we are well positioned with our technology and products to capture the growing worldwide market opportunities. The TS growth platform's mission continues to be to help customers solve difficult technical and business challenges in their fuel cell programs. Ballard's unique assets, primarily in its area of expertise of proton exchange membrane fuel cells can be utilized to create complete bundled solutions. Automotive has historically been the largest part of our Technology Solutions platform, but the application reach continues to grow. The types of offerings include: product development, testing services, licensing and technology transfer, component design and manufacturing as well as system design and integration. With that, the next slide provides the key strategic objectives for Ballard related to our Technology Solutions business. First, to reduce customer commercialization friction points to build -- to achieve high-margin revenue that continues to support the Ballard business overall, to enable longer-term market opportunities, to build and cross leverage our IP portfolio, technology advancements and know-how, and to align programs with core competencies and resources, which allow us to leverage Ballard's power products into the emerging markets, such as truck, rail and marine. Our 3 key assets are our people, our intellectual property, including patents, know-how and trade secrets and our testing and prototyping capabilities within our facilities. I will talk about the first 2. In terms of our people, we currently have approximately 400 technical professionals covering disciplines from fundamental material science and electrochemistry through mechanical and electrical engineering all the way to systems engineering and reliability growth engineering. Our core science and engineering staff can be characterized as having a high level of experience as evidenced by their average tenure of 10 years. In total, we can draw upon approximately 4,700 person years of experience. In addition, our employees have proven to be highly dedicated and proud of their contributions to Ballard as evidenced by the consistently high employee retention rates. Most importantly, though, we are a collective team of specialized fuel cell developers. In terms of our intellectual property, given our long history and significant cumulative investment, Ballard's IP position is very strong and, as shown in the graphic, covers all aspects of proton exchange membrane fuel cell technology. There is a larger portion of the pie in the key core technology areas of membrane electrode assemblies and bipolar plates. Perhaps even more importantly, from a Technology Solutions standpoint, in addition to the 400 patents and patent applications, we have know-how and trade secrets, which are critical to effectively leverage this intellectual property from a commercial standpoint. Our deep know-how includes catalyst layer processing, MEA manufacturing and sealing, plate design in carbon and metal, plate manufacturing, fuel cell system control strategies, system modeling and optimization. In this slide, I have summarized our broad portfolio of key technology solutions markets as well as some of the key customers. Not surprisingly, they overlap extensively with our key power product markets already covered by Rob. We are engaging with customers in our key markets, but also leveraging our activities to support customers looking at emerging markets. Our Technology Solutions business is highly cross leverageable, giving us an early view into industries evaluating fuel cell solutions, which also provide a highly innovative environment. Benefits include reinforcing our business models, validating markets and establishing strategic relationships early with blue-chip customers. A few examples that I will speak to momentarily include, in automotive, our engagement with Audi and more broadly, the VW Group; in buses, trucks and forklifts with Weichai Power in China; and in rail, Siemens, which builds on our earlier work with China -- in China with CRRC. Technology Solutions has historically been a $50 million to $60 million business. And looking forward, we expect relatively modest growth as customers will tend to cycle through as they transition to product sales and then being replaced with new customers in new market segments. I would like to briefly -- provide you briefly with 3 examples or case studies of how customer needs are aligned with our Technology Solutions offerings. In automotive, VW, Audi have engaged us in a full product development program, which began back in 2013. The 9-year technology and product development engineering services contract runs to mid 2022, and has led to the development of a high-power density fuel cell stack for the passenger car market with industry-leading performance metrics, including power and power density, maximum operating temperature and free start capability. This stack was 100% designed and developed by Ballard. We also recently announced a nonbinding MOU with Audi, which will result in Ballard's IP rights for this stack in all applications, including passenger car and commercial vehicles and trucks, which builds upon our existing rights in bus, rail, marine, off-road vehicles and stationery. Our second example is aligned around bus, truck and forklift markets, focused in China with Weichai Power. We're expecting a continuous collaboration through our Weichai-Ballard joint venture in development today, in 5 years and 10 years from now. The first installment of this development is the initial $90 million development program of several products and includes the technology transfer for the manufacturing of carbon bipolar plates and the assembly of fuel cell stacks and modules. I am particularly proud of the technology transfer progress to date that has enabled the first PEM fuel cell gigafactory. This co-development has also leveraged the Weichai expertise around designing engines and its strength in supply chain. Our third example relates to the European rail market aimed at supporting Siemens by introducing to them fuel cell technology for the regional trains to support their overall electrification strategy. For Ballard, this work further builds our internal capability in application-specific engineering. A similar rail development program was completed in early 2019 for light rail trams in China with CRRC. In both cases, Ballard has and will have designed and built 200-kilowatt rail modules. Again, this is an opportunity to develop and demonstrate products as well as develop long-term customer stickiness. This final example further punctuates how early learnings from these customer demonstrations can be applied to our future products. We are now going to show a brief video on what our customers have to say. Thank you. [Presentation]

Great. I hope you found that video informative. We're now going to take a brief break here to take some questions that we've been getting. And we've had several of them. [Operator Instructions] I've also had a number of questions that -- around cost reduction and some of our efforts in some of the geographies. And I think we'll get to some of that later. So let me be a bit selective here on the questions. And again, if we don't get to them, we'll get back to you later.

But perhaps the first question I can direct is to Randy. Again, noting that Ballard is, again, with -- particularly now with MAHLE and with Weichai has its global footprint. And the question is around IP protection and what Ballard is doing to ensure that it protects its IP.

Yes. So this is a question we frequently get. And it's important to understand we take 4 key principles when we look at IP protection. The first is the quality of the counterparty. And so as an illustrative example, when we looked to collaborate with Weichai in China, we did a lot of due diligence on who is Weichai. We actually went and met with a number of companies that Weichai had invested in or partnered in globally. They're very much an international company that respects brand, respects reputation, respects intellectual property. So the quality of the counterparty is critically important. Of course, MAHLE is similar. Secondly, we also look at how we structure our arrangements commercially with a counterparty. And so where we intend to provide intellectual property, we contract for that and we get paid for it. So a value transition that we get paid for. And then we put structural barriers in our contracts to prevent leakage where we're not intending to transfer and get paid. And the third, and this is critically important is, of course, we've got to stay ahead on the innovation curve. We don't stay static on where we are. So we're constantly investing in our core R&D technology, in our core products to stay ahead with future generation technologies. And the fourth is where there has been leakage or some type of compromise of our intellectual property, we're going to be very aggressive in defending that and making sure we're taking appropriate actions.

Great. Thanks, Randy. We've had also a number of questions on MAHLE announcements. And perhaps I'll throw this over to Kevin. Some of the questions are a bit about the technical scope of supply referencing Ballard, taking the fuel cell system, MAHLE on the power trains. Can you maybe just comment on how you see that? How important it is that Ballard is involved in integration? And any comments you might have as well? We've had questions on the time line, when we might see some product in the market?

Thank you, Tony. Yes. Well, maybe I'll deal with the second part of the question first. Certainly, in my second presentation later today, I'll go into the details of when we roll out some of these products. And I'll be in a position to comment more specifically. But in general, the first -- this engagement has just started. We're working already in terms of the scope of supply. So expect some of the first units to come out in the 2022 time frame. With respect to the scope, again, I will be talking about the fuel cell module, certainly, the scope that's closest to Ballard. But when you start looking at some of the balance of plant components, things like coolant pumps, things that are more common across the industry, that's where MAHLE will have an opportunity to really contribute in terms of driving that down. But I think the essential piece is going to be around things like DC to DC conversion, powertrains, some of the controls integration that can be achieved. But it's safe to say, Ballard will stay core to its areas of expertise and the addition of MAHLE and their expertise will allow for a seamless integration, something that we've seen to be important in many earlier generations of engagement with OEM customers and otherwise.

Great. Thanks, Kevin. And do you want to add -- Robert, you want to add anything or...

Yes. Just in general, what we also see is the need for greater systems integration. And that -- as Kevin mentioned, that seamless integration, the products of the future will be much better packaged, much tighter integrated. And this will help drive down cost but also nudge up the reliability of those systems and make them easier to apply across the full fleet of vehicles intended.

Great. Thanks, Rob. So while you have the floor, Rob, the question was just noting in our e12345 strategy, we focus on China, Europe and North America, California. One of the questions was just about the rest of the world. And we don't have on our agenda today, of course, we're focused on those. Rob, the question is just, do we see any other opportunities outside of those key markets and is Ballard active in any other markets?

It's a great question. And Randy mentioned, there are already 20 countries around the world with hydrogen road maps. And what we're seeing is expansion of this road map of -- and the recognition of the use of hydrogen across the globe. We prioritized those markets that are furthest along. Europe has a deep history in terms of looking to decarbonize, as well as China and California. But as mentioned, this is now spreading around the globe. And with that, we are also expanding our activities. We're very focused on our core markets, but we're seeing tremendous opportunities in countries such as Australia. In fact, we already have an initiative called H2Oz which is intending to put buses into Australia, fuel cell buses in the near future. And then there are large markets such as India, that are moving very quickly in their recognition of the importance of integrating renewable energy with zero-emission technologies. So we see a bright future, as I mentioned, and these markets will have more to talk about in the near future. Thank you.

Great. Thanks, Rob. We have had also 2 or 3 questions on another market application, which we haven't talked much about today, and we don't have a lot, which is the aviation sector. And there's been a number of recent announcements made about the potential for fuel cell technology in aviation. Randy, maybe you want to give your thoughts on just how you see fuel cells playing in that, and is Ballard considering that as a market opportunity?

Yes. So the aerospace industry is an industry that must decarbonize. When you look at the contribution of emissions from aerospace, we're talking about a significant contribution that really have no other option -- viable option in terms of how to abate that segment other than hydrogen. And so what we're seeing, and we've seen some of this over the last few weeks with some of the major aerospace companies announcing plans for hydrogen and also looking at fuel cell technology. I think this is a market that we see longer term. We're not going to see, in my opinion, high scale adoption of hydrogen fuel cell technology in the next number of years in aerospace. But as you start looking at 2030 and onwards, we're going to see significant adoption, in my opinion, in those markets. For Ballard, I think what you can look for is an important announcement on the aerospace front in 2020.

Great. Thanks, Randy. I'll -- I think we'll wrap up the questions. We have some more questions, but I think we're going to cover some of them a little later. So perhaps what we can do is just wrap up this section. We have 2 or 3 more Q&A sections over the course of the day. And so we'll come back to some additional questions later if we don't answer them through the presentation. So thanks, gentlemen.

So what we'll do now is we're going to move onto the next portion of our agenda, which is to review and update on commercial activities in our key geographic target markets, namely China, Europe and in California. So I'm going to introduce all of the speakers now, all of whom who are dialing in remotely. And then I'll come back and we'll take some Q&A after the presentation. So first up will be Alfred Wong. Alfred is the Managing Director for Asia Pacific region, and Alfred is located in Hong Kong and will address the China market. Alfred has been with Ballard for 20 years. Following Alfred will be 2 senior executives with -- from our European operations, who will discuss activities in that market. First will be Jesper Themsen, President and CEO of Ballard Power Systems Europe, located in Hobro, Denmark. Jasper has been with Ballard since before the acquisition of Dantherm Power, in 2010. And Oben Uluc, our Director of Sales for Europe, Middle East and Africa regions, who is located in Berlin. Oben has been with Ballard for 6 years. And finally, we'll hear from Nicolas Pocard, our Director of Marketing and Business Development, who will address commercial activities in the California market. Nicolas has been with the company for 8 years. So at this point, I'll turn it over to Alfred.

Thanks very much, Tony. Okay. Good morning or good afternoon to everybody. I'm calling in from Shanghai today. Just wanted to say, hope that everybody is staying safe wherever you are. I was wishing I could join the rest of the team in Vancouver today, but unfortunately, due to COVID, that's a little bit more challenging. Before I get to the main part of the presentation, I just wanted to share some of the recent photos of the fuel cell vehicle congress event that took place in Shanghai a couple of weeks ago. Now in China, there's been a really extensive programs made on the recovery of COVID in the past few months. And it was one of the first major exhibitions that I've attended since the outbreak. As we can see from the photos, the exhibition floor was just absolutely packed with people and the conference breakout sessions had people lining up from outside of doors. As you can kind of see, China is really now fully back in business. Also at the same time, a number of local manufacturers have announced major vehicle launches that's going to happen in the next few years. So here, you can see a vehicle, that's displayed by FAW, Great Wall, SAIC. They've also made significant announcements to launch vehicles. So lots of activities happening at this time in industry. If we can go to the next slide, please. Just wanted to remind all viewers here that China is considered to be the world's largest and fastest growing commercial FCEV market. And just to put some context around that. While there are about 5,000 new buses manufactured in North America each year and about 15,000 in Europe, in China, the numbers in the range of about 200,000 to 400,000 a year, depending on what data source you use. And on the truck side, about -- of the 4 million trucks that are manufactured globally each year, about 45% of them are deployed in China. So a very, very large market. Now relative to some of the other countries that have fuel cell ambitions, China has had a relatively late start. It's really been about 2015 and '16 period, where the volume has really started to ramp up. But as you can see from the graph in the middle, the growth has been very quick and very rapid over the last few years. Overall, China has an ambition to reach 1 million fuel cell vehicles and 1,000 refueling stations by 2030. It's now well on pace to do that. So today, there are about 7,200 fuel cell vehicles and 80 refueling stations that's been demonstrated so far. We expect more of that to be announced before the end of this year. So it's tracking well against the published road map. If you go to the next slide. If you've been following the industry, you have probably seen this already. But just so last week, there was an announcement made by the 5 ministries joined together on a new policy that's going to be guiding the development of the FCEV industry. And this policy is really great news for the industry as a whole as it provides an overall framework on how the government is planning to continue to support the growth and the demonstration. So based on that latest policy, what we can expect going forward is that the central government will be substituting the Direct Subsidy Scheme, which has been using. Currently, what it does now is to provide subsidies directly to manufacturers. And what it's going to be doing is to substitute that by going with the financial incentives or rewards, which should be distributed to selected demonstration regions or city clusters. And the demonstration regions are expected to have more autonomy on how these incentives will be used to continue to support the industry players and drive the demonstration programs forward. So under the framework of the demonstration regions that's been announced, what it's looking for is to select regions that have very favorable conditions to execute these demonstrations, so factors including the competitiveness of the industrial base -- the completeness of the industrial base, competitiveness of the hydrogen supply conditions and economics, prior experience in demonstrating fleets and as well as their own local policy that's guaranteed to be in place to support the growth. So at this time, all the key regions right now are in the process of preparing for the program application, which is due -- expected to be due in November 15. So we can expect to get a little bit more clarity on how this is all going to get rolled out in the upcoming months. But what's clear at this time is that the demonstration programs will leverage both funding from national and regional levels. So it's overall a very positive sign. Going to the next slide. At the regional level, at this point, there are now 36 regions that have announced plans to promote FCEVs and as well as the deployment of refueling stations. So the table here is just an illustrative example of some of them. And over the past weeks, several regions have already published updates to the plans. And we're expecting more news to be coming soon as different cities plan to cluster together to form their demonstration regions. And what's really encouraging, when you look at all the data, is that if you sum up the targets from all different regions, you'll see numbers and goals that far exceed the targets of the national road map. So from a regional level, if you add it all up, it's going to get -- you're going to get a much further -- bigger number. Next slide. So what does it all mean for Ballard? We strongly believe that all the work that we've done in the market so far puts us in a very good position to support China on these demonstration programs. With the policy document, there are a number of key themes that were identified as part of this framework, which I've identified on the left here. The first one really calls for the breakthrough in industrialization of core fuel cell components. And as you've heard what -- some of what Rob and Kevin has discussed, we've been involved in the development and the local production of fuel cell stacks and systems with our joint venture partners and some of these activities date back to 2017. There's also a section that calls for the demonstration of certain performance metrics in power density and free start, for an example. And at Ballard, we've successfully demonstrated a number of -- or all of these parameters in real-life operating conditions. Thirdly, and I think that -- one that's really important is that, going forward, the substitute financial reward system is really going to favor the demonstration of heavy-duty trucks, heavy-duty vehicles that have a very high-power requirement. And we understand from our work that we've done before that this is really the area that it provides the strongest TC -- that's the most attractive -- that's as most attractive value proposition to the end users. It's also an area where we really feel that we can provide the most attractive TCO given our proven durability in this area. It's really what sets us apart from our competition. And lastly, the policy does mention putting a focus on the promotion of products from leading enterprises. And I think -- I believe that partnership with Weichai, which I'll get into more -- a little bit more later in the presentation, will really position us to win in this market. Going forward to the next slide, you'll see that we currently have 3 operating entities in China. The first one, it's our WFOE that we've established in Guangzhou in 2017. And under this wholly-owned sub, it really serves as our overall command center in China. And we populated this entity with sales, service, application engineering, quality supply chain capabilities that could support all our activities in the country. As I mentioned before, we also have our Weichai-Ballard joint venture, which is a 51% -- with 51%, 49% owned by Weichai and Ballard, respectively, which is -- we established it 22 months ago when we entered into our strategic collaboration. That's the exclusive manufacturer of the LCS series of stacks and FCmove modules in China. Again, I'll touch on that in a moment. And third, it's our Synergy-Ballard joint venture that's based in Guangdong Province. And we've established this entity in late 2016 to manufacture our 9SSL series of stacks which really -- it's considered to be the workhorse of the industry and powering large number of vehicles that's currently operating in China today. Next slide. Our strategic collaboration with Weichai started in 2018, and there are really 3 key elements to that when we launched that. First is a 19.9% equity investment into Ballard. Second is the formation of the joint venture. And then third, the $90 million technology transfer program that Kevin talked about earlier. Now at Ballard, we're absolutely convinced that we have the best partner in China to drive our business forward with Weichai. And I recall that at the time when we were looking for a partner to move forward with, we were looking for somebody with exceptional operational capability, strong supply chain presence, strong customer base with all the OEMs, and Weichai really checks off all those boxes. They're the #1 heavy-duty engine -- they've been the #1 in heavy-duty engine sales in the world. And within China, they own a 30% -- 34%, excuse me, market share with plans to grow up to 40%. And as I mentioned earlier, the fuel cell vehicle policy in China is really going to put an emphasis on the demonstration of commercial trucks and trucking applications of higher power. And in Weichai and all their engine deliverables, 70% of their products go into truck applications. In addition to loose engine, Weichai is also very vertically integrated with a number of strong OEMs. So as you can see on the right side, a select handful of them. Zhongtong Bus, which is one of the top energy bus manufacturers in China with an annual capacity of about 30,000 new energy buses per year. Sinotruk, second largest heavy-duty truck manufacturer in China, essentially heavy-duty industrial -- heavy-duty automotive, which is the largest manufacturer of new energy commercial vehicles in Northwest China, and also KION, which is the world's second largest supplier of forklifts. So together, we believe that there's a lot of things that we can do in the truck space. Next slide, you'll see that -- you'll see this later on in the -- in today's event as well. Just in Weifang, where Weichai is located, we've just commissioned the world's largest manufacturing fuel cell center -- the largest fuel cell manufacturing center, which we've codenamed Giga Shandong 1. And it's a brand-new facility that just finished construction this year. It's got a total floor space of 225,000 square feet. It's certified to IATF 16949 automotive standards, and it's got a capacity to produce 34,000 stacks, which is an equivalent of 2 gigawatts or 2,000 modules per year. So we're really looking forward to getting this factory up to full speed and producing products. And if you go to the next slide, the scope of our joint venture with Weichai really doesn't stop at manufacturing, but we're also continuing to invest in development of next-generation products to meet the evolving requirements of the local market. So in the technical center that we have with Weichai, we now have 115 engineers that's -- and technicians that's now working with the Ballard team on 4 separate module programs and 2 stack programs. We want to ensure that we remain to be the best in the industry to continue to push innovation. And also, the team there is working in one of the world's most well-equipped facilities. So in the technical center in Weifang, there's a full array of stack and module test stations, thousands of blank component test stands, prototyping capability and other specialized equipment that's especially designed for hydrogen testing. Going on the next slide. Since we started our activities at the JV, we've now built and commissioned over 100 modules. That's been integrated into flagship at vehicle platforms. So 4 of these are 12-meter buses with Yutong, Zhongtong, Asiastar and Nikola. And also, we've got a module that's now been integrated on 49-ton semi with essentially heavy-duty auto. A majority of the buses that we've put together so far are now under revenue service in Shandong province. There are now 10 dedicated fuel cell bus routes that's testing these buses. And over the next few months, we can expect to see more vehicles added to this list. Going to the Slide 12, on the next slide. Overall, in China, we strongly believe that we offer the best-performing products in the industry, and this is reflected in our dominant market share that we hold today at 45%. So Ballard technology now can be found in close to 3,300 vehicles, excuse me, with 17 different OEMs, and have now -- these vehicles have now traveled in excess of 42 million kilometers. Of these vehicles, about 1/3 of these are buses and the remaining 2/3 are trucks. And again, we've been working with a number of very, very high-profile blue-chip OEMs, including Yutong, Zhongtong, Dongfeng Motors and others. Going on to Slide 13, just as a reminder to some of the viewers. Before any vehicle can get qualified for subsidies in China, it must go through a certification process by the Ministry of Industry and Information Technology, a grid of vehicles entered into a new energy vehicle promotion list. So far, now -- we're now up to 70 vehicles. Last week, it was 65. But today now, there are now 70 different vehicles that's now listed that has Ballard technology insight that ranges from 8.5- to 12-meter buses and various different types of trucks as well as specialty vehicles, and that list is continuing to grow. Now on the next slide, I just wanted to show you some of the photos of the over 1,000 buses that we currently have deployed in China. So now these buses have been operating in more than 10 cities, and now already accumulated over 13 million kilometers of service. And then on the truck side, we now have over 2,200 trucks operating in over 20 cities, including major metropolitan areas, including Guangzhou, Shenzhen and Shanghai. And now we're at over 29 million kilometers of service delivering goods for some blue-chip companies in China including e-commerce giant JD.com, which is the equivalent of the Amazon in the U.S. and also a logistics company, such as SF Express, which is the equivalent of UPS or FedEx. Aside from trucks, we also have one of our landmark projects. It's a tram project that we've been running over the past year in the city of Foshan in South China. And this really is the first commercially operating tramline in the world. And we've been working on this project with CRRC Sifang over the last 5 years to put this product forward. Currently, we've got 5 trams running in the first phase of this project. It's running along a 17-kilometer route through the city. And each tram is powered by a 200-kilowatt Ballard module, and it's got a maximum capacity to carry close to 400 passengers and has a range of 125 kilometers. And as of this date, the -- it's now got over 100,000 kilometers of service in this fleet. And it's an absolutely beautiful tram system. If you ever do get an opportunity to visit China once the COVID travel restrictions are over, I do highly encourage you to come visit and ride this. It's quite an experience. And on the next slide. There's still a number of emerging opportunities that, I think, represents great upside for our business at Ballard. And those include mining trucks, forklift, passenger vehicles and marine vessels. Recently, we've demonstrated a 200-ton mining truck that's equipped with a 340-kilowatt fuel cell engine. So comprising of 4 separate units of HD85 module. And that's -- we put that into demonstration now. And we believe that there is a large undiscovered opportunity in the mining sector as mines look to decarbonize. And also as part of our activities with Weichai, we also have ongoing activities to look at development of fuel cell forklift solutions together with their -- KION and we'll expect to have more on that shortly. Lastly, just kind of the -- in conclusion, I do strongly believe that China is going to continue to be a dominant force in the commercialization of FCEVs. As I mentioned before, it is the world's largest commercial vehicle market. It's got all the right elements with the strong government support and with an ambition road map. And I believe that over the past few years with all the work that we've done, we're very well positioned to continue our growth, especially under the Weichai-Ballard joint venture platform, where we have an absolute obsession and focus on cost reduction and advancing localization. And lastly, even with -- despite all our ongoing activities, I still believe there's a vast amount of untapped opportunities and emerging applications that we could look at including passenger vehicles and other specialty mobility applications. So do look for us to do more in China going forward. Okay. And with that, I'll pass the floor to Jesper and with Oben who will carry on with the update on the European market.

Thank you very much, Alfred. Good day to you all. I'm calling in from Ballard Europe in Denmark under these circumstances. Unfortunately, couldn't be there. I've been working with fuel cells and with Ballard since 2002. I've enjoyed the journey to where we are today, and I'm really excited with the outlook. As illustrated on the next slide, we see a lot moving our way in Europe. Being deeply involved in the European market, it's amazing to see what is happening on policies and funding supporting green economic growth and, at the moment, green economic recovery in Europe. At EU level, we have the Green Deal. It's focusing on sustainable financial growth with the ambition of becoming the first climate-neutral net zero-emission continent. A main pillar here is the hydrogen strategy with a strategic objective of 40 gigawatts of green hydrogen production by 2030. Also at a national level, we see very ambitious hydrogen strategies being launched. Several of these within the last 6 to 8 months. We have Norway, we have Germany, France, Holland, U.K., Portugal coming up with ambitious strategies, among others. If you look at Germany, you'll see a EUR 9 billion commitments. If you look at France, you will see EUR 7 billion commitments. This is serious. On the next slide, you will see that Ballard is highly active in Europe to support and to move these market opportunities. With our leading technology, we are in a very good position, and we are even able to foster further uptake in the market than what is given by this government support mentioned before. At our European headquarter in Denmark, we are 80 dedicated employees. We have 18 years of experience with fuel cells. We have presence in Germany, U.K., France and Norway, and we have service centers in Denmark, Germany and U.K. This organization supports the current products in the field. It supports our customers. It supports our new opportunities, supports our new products. For the activities in the different segments that we are covering in Europe, I will leave that with Oben who has the direct daily interaction on these segments and these markets. Over to you, Oben.

Thank you, Jesper. Good morning, and good afternoon, everyone, from a sunny afternoon in Berlin. I have been with Ballard for about 5.5 years now, which I qualify as the fastest 5.5 years of my life. I'm going to update you today on fuel cell buses, truck and rail segments in Europe, how these segments are developing, how large the opportunities are, how Ballard is doing and what are our strategies. And then I will hand back to Jesper to continue with the maritime segment. European cities and authorities are taking concrete steps to improve the air quality in city centers. All over Europe, low-emission zones are being deployed. Buses are important pillar of the public transportation in city centers as well as in suburbs. And it is critical that the public buses becomes zero-emission and get electrified. Several large European cities like London, Paris, Hamburg, Copenhagen, Amsterdam and many others have committed to buy 100% of their buses as zero emission by 2025 or before. So a lot of activity is happening. As you may know, the public buses have a lifetime of roughly 10 to 12 years. So we expect about 8% to 10% of the bus fleets will be replenished per year. So accordingly, the procurement of zero-emission buses will reach about 66% by 2030. Hydrogen fuel cells will play an important role in this transformation. In a recent very exciting announcement, U.K. government announced the first hydrogen bus only town initiative. 17 U.K. cities applied, and we will see soon who will be the first city. Going to the next slide, I want to inform you about the status of the deployment in Europe. Over the last 7, 8 years, several fuel cell bus -- electric bus demonstration projects have been completed. Technology has been successfully demonstrated, very key things like long range over 400 kilometers a day, fast refilling 7 to 8, 10 minutes and route flexibility, practically giving the chance the possibility, one-to-one replacement of diesel buses without compromising the existing time plans. We are currently experiencing a rapid increase of fuel cell electric buses in Europe. In 2019, maybe there were about 40, 45 fuel cell buses on the road. At this moment of time, in total, 225 fuel cell electric buses powered by Ballard are either in service or ordered at bus OEMs and will be delivered soon for 17 European cities. Furthermore, 848 additional fuel cell electric buses are either at tendering stage or planning stage preparing for rollouts, pretty much in every part of Europe, as you can see on the map itself, in Germany, in Austria, Latvia, Netherlands, Belgium, U.K., France, Portugal, Spain, and other countries like Croatia and Poland are expected soon. We had previously announced a partnership, H2Bus Europe project, which is really an ecosystem partnership with key partners in the hydrogen value chain with the aim to deploy 600 fuel cell electric buses by 2023 at 3 countries and then carried it to 1,000 buses in the next stage. And at this moment, first deployments are being planned, and we are expecting the tender soon. It's estimated up to 100,000 zero-emission buses will be deployed by 2030 in Europe, and 25% to 30% of those buses require actually fuel cells to deliver duty cycle. So with that, we are expecting a market opportunity of 25,000 fuel cell electric buses for Ballard in Europe. Our current market share is a little bit north of 80%. And as the market grows, we will see more competition, and customers will enjoy more choices. We are confident to keep our market leader position in this segment. In the next slide, I want to give you some examples of our customers coming with new products to the market. Over the last 18 months, there have been a number of new fuel cell electric bus announcements by our European bus OEM customers, such as world's first fuel cell double-decker bus by Bamford-Wrightbus or articulated 18-meter bus, bus rapid transport by Van Hool or the new generation 12-meter bus Urbino 12 hydrogen by Solaris. Solaris has also introduced a fully zero-emission trolley, eliminating the diesel range extender via Ballard fuel cell to allow over 100 kilometers of autonomy for a conventional trolleybus. We expect to see more and more products to be announced within the next years, so that our customers will have more choices. In the next slide, I would like to talk about a very important segment for Ballard, which will be actually fuel cell trucks. Decarbonization of the heavy-duty transportation is one of the key targets in European Union. For this purpose, European Union announced a new regulation for heavy-duty trucks in June 2019 and set emission reduction targets for OEMs. In 2022, the buses will be added into this regulation. The new regulation requires CO2 emission reduction in the first place 15% by 2025. And later, 30% by 2030 versus 2019 levels, very strict rules. There is a common consensus between OEMs and industry that in order to meet these targets in Europe, fuel cells will be required. The longer the ranges, the more payload the truck has, the more kilometers it drives on the highway, the stronger is the value proposition of fuel cells. Of course, with the universal benefit of quick refilling with hydrogen. There have been major announcements recently by Tier 1 OEMs as well as Tier 1 suppliers that they will develop fuel cell solutions. In the next slide, I will touch base about the size of the opportunity and the strategy Ballard has for this segment. Our market research shows that the opportunity is up to 100,000 trucks by 2030. This is a very large opportunity for us here in Europe. Ballard has a 3-tier strategy. The first step is to participate in the demonstration projects, test the initial products on the field, collect data and prepare for the next phase. Ballard is currently involved in a number of truck demonstration projects in Germany, in Netherlands, in U.K. for various applications like 26-ton truck on highway drives or a refuse truck in the city centers. So very different duty cycles, and it helps us greater to learn. As said, this is going to be a large volume market. We know that we need to be in key geographies closer to the end users as well as in Europe. So for this purpose, we need to foster partnerships with European Tier 1 partners who has scale, who has experience and access in this segment. And you have heard from Randy and from our website yesterday, Ballard will collaborate with MAHLE of Germany to develop medium and heavy-duty fuel cell systems for commercial trucks. MAHLE is a Tier 1 OEM in Germany with 77,000 employees globally. The partnership really merge the strengths of both companies, Ballard's deep understanding of fuel cell stack technology and system design over 4 tiers with MAHLE's expertise and balance of plant components, market access and scaling capabilities. While this is a very important step for us, we are also proactively looking for opportunities to build ecosystems -- ecosystem partnerships with other value chain partners to reduce the overall TCO. And similar to H2Bus Europe projects, we are looking for opportunities in Scandics as well as other places to roll out truck fleets. With the next slide I would like to give you some update on another very interesting application, which is rail. Over 40% of the rail tracks in Europe are not electrified. So typically, diesel engine and vehicles are running on these lines. Rail vehicles have very long lifetimes, 20 to 30 years. So communities who buy diesel engine rail vehicle right now, they know that they will tie themselves up for 20, 30 years which they don't want to do. Currently, there are 2 options to electrify these lines, either overhead lines or overhead opportunity charging or fuel cells. Building new overhead lines cost anything between EUR 2 million to EUR 4 million per kilometer in Europe. So it's very expensive. To build also charging infrastructure at small railway stations, remote places from main power lines is not economical. So fuel cells offer an economical proposition in this segment, especially for regional for commuter trains and shunt locomotives, whether these are new investments or retrofitting. What we learned from our rail partners and also from shift to rail study of European Union, the market can exceed 1,000 regional trains by 2030 with significant interest in Germany, France, U.K., Austria, Netherlands, Scandics, Poland, many parts of Europe. All these countries have plans to significantly increase green hydrogen production, and rail is one of the possible solid uptakers of green hydrogen. German national hydrogen strategy in Germany where I live has already measures to support deployment of fuel cells. Next slide, please. Ballard has built partnerships like with Siemens Mobility of Germany to demonstrate the fuel cell technology and to secure a market access in mid and long term in Europe. We are currently developing a 200-kilowatt system for Siemens new EMU platform, Mireo. This is a purpose-built train. It's the best-in-class performance in electrical regional trains. As it's purposely designed from scratch, Ballard and Siemens work closely together to take benefit of the latest technologies available to us. Siemens has started to build this hydrogen Mireo version in Germany already. So I'm very hopeful that you should be able to see these trains in revenue service in short time. Furthermore, there is another application where we see synergy is shunt locomotive with similar product line. There are over 65,000 shunt locomotives in Europe. Most of these shunt sites are either in city centers or near city centers adding to the air pollution. So we need to clean them up. And there is an opportunity to retrofit these locomotives with zero-emission fuel cell solutions. In order to demonstrate this technology, we are about to sign the very first contract very shortly in Europe. So with that, I'm handing over back to Jesper to continue with the maritime activities. Thank you.

Thank you, Oben. We see a lot of interest from the maritime segment. First of all, zero-emission requirements from the International Maritime Organization who is committing to reducing greenhouse gases by 50% by 2050. That is supported by Europe cutting CO2 emissions by 50% in the same period. That is significant and the change in the industry. Norway is a country leading in this segment. They are enforcing 100% zero emission in shipping in their heritage fjords already from 2026. So this all is moving towards zero-emission shipping, where fuel cells are getting well positioned. As you can see on the next slide, we are gaining experience and building partnerships in this segment. So we are developing megawatt scale systems with ABB for cruise ships. We are developing the world's first sea-going renewables powered ferry in Scotland under the HySeas III project. We are electrifying port equipment with hydrogen and fuel cells in the H2Ports project. We have a very significant flagship project where we are powering a Norled ferry in Norway with 600 kilowatts of fuel cell power and a river barge in France with ABB, 400 kilowatts of fuel cell power for main propulsion. Then we have the first liquid hydrogen ferry, which will be with Norled, that's on the Hjelmeland route in Norway. Also a very interesting significant project. And finally, at the moment, we have just delivered 200 kilowatts for the Elektra fuel cell river barge in Germany. To support this and many new upcoming projects and opportunities, we are investing, as you can see on the next slide. The opportunity here is significant. We estimate 2,000 megawatt opportunity in 2030. And we're investing in our Marine Center of Excellence. As mentioned before, it's in Denmark, and it was established in 2019. But we're also investing in our new FCwave 200-kilowatt product that is dedicated to the Marine segment. We had the product launch earlier this month of the FCwave 200-kilowatt product. And before Nicolas talks about California, I would like to show you a short video telling more about this new product. Thank you. [Presentation]

Good morning. I'm very happy to be joining us today -- you today. I'm here from Vancouver with the rest of our team. I have been working in the fuel cell industry over the past 15 years. And I truly believe that the period we are going through at the moment is really exciting. We see a lot of change, and I think we start to see the adoption of mobility, using hydrogen and fuel cell technologies. So what I would like to do today is to give you an update of what is going -- happening in California. California is leading the way towards the clean mobility. California is also leading the way with adoption of regulation, which are going to drive the adoption of zero-emission mobility. As just of last week, the governor of California have signed an executive order directing that all new sales of cars and passenger truck, starting from 2035, will have to be zero-emission. But California is also leading the way with the adoption of hydrogen mobility. Today, there are over 8,500 fuel cell cars in the streets of California, close to 50 fuel cell buses in operation in major cities. And there are over 20 fuel cell trucks being tested in different ports and warehouse facilities. They are a network -- there's a network of close to 50 hydrogen refueling station, which is spread across the state. So yes, California is leading the way and is putting vehicle on the road. But let's start to look at a little bit what is happening with transit buses. As of last year, the California Air Resources Board has issued the Innovative Clean Transit regulation. With this regulation, by 2023, transit agency will have to start buying a minimum of 25% of zero-emission bus for their fleet. This number is rising to 50% by 2025 and will reach 100% of all new purchase of transit bus will be zero-emission by 2029. This means with the lifetime of the buses which are being deployed that by 2040, all transit buses operating in California will be zero-emission. This represents really a huge market opportunity for battery electric and fuel cell electric buses. So if you see where Ballard is today, we are the true leader in the hydrogen mobility for transit buses. There are today 37 fuel cell electric buses powered by Ballard products in operation at Orange County, AC Transit or SunLine Transit Agencies. So buses are working every day and have proven their performance. The test done by OCTA recently have shown that the fuel cell electric, a New Flyer fuel cell electric bus can reach 350 miles of operation during a single day on a 1 single refueling, even operating on highways at higher speed as required by Orange County. Today, fuel cell modules, which are installed on those bus, are showing availability of above 97%. And this is a data from 2019 and 2020 operation of the Ballard fuel cell modules. Today, products are available. Standard fuel cell buses are commercial products offered by New Flyer with a 40-foot, 60-foot fuel cell electric bus and by Eldorado with a 40-foot fuel cell bus. All those vehicles have been tested by the FTA at Altoona and are available for purchase by transit agency across the United States. Ballard have around more than 95% of the market share in California for all the new fuel cell buses, which have been purchased in 2020 -- 2010. But what is more important is the customer satisfaction. We need to make sure that the vehicle which are deployed today in the streets of California and the rest of the U.S., meet the requirement of operation and what the transit agencies are expecting. And if you look at what Michael Hursh, the General Manager of AC Transit, is saying, for him, "I've been very impressed by the performance of the fuel cell buses. There's no range issue. They fuel quickly. And more important, the reliability of fuel cell electric buses is comparable to the one of internal combustion engine like diesel and CNG buses." But what is very interesting, as transit agencies are planning for the ICT regulation and how are they going to meet the ARB regulation, where they will have to transform all their fleet to zero-emission. They're looking at how we're going to do the deployment of zero-emission versus at scale. It's always very easy when you start with 5, 10 buses. You can plug them with battery electric. It's a bit more difficult with fuel cell electric. Even if you start with 1 or 2 vehicle, you need to invest in a full hydrogen refueling infrastructure. So the cost per vehicle, when you start only with a handful of vehicle, is quite high. But as you are increasing the numbers of vehicle, the infrastructure investment you have made is going to be neutralized with the larger numbers of vehicle. And what you start to see is, as you increasing the fleet size the cost of the infrastructure per vehicle is going down for hydrogen refueling infrastructure. But on the other hand, it's going higher per vehicle for battery electric recharging electric infrastructure. Why is that? Well, as you are putting more and more battery electric bus to recharge, you are going to need more complex electric charging. And you're going to need more and more energy to be delivered to a depot. You will have issue with space, how are you going to recharge your vehicle, and you might need even a power substation. So the result of the study, which have been done and publicly available on the ARB website from all those ICT studies are really showing that the cost per vehicle is decreasing for hydrogen infrastructure, starting when you have around 30 vehicle in a range of $100,000, $150,000 per vehicle, but reaching less than $100,000 per vehicle whenever you start to be at hundreds of vehicle. Well, the opposite happened for battery electric, and it can reach up to $500,000 per vehicle when you start to have hundreds of vehicle in the same depot to charge simultaneously. So finding from these studies is really driving agency to consider the ratio of battery electric and fuel cell electric vehicle they're going to deploy in the future. And I would like to highlight one of the case study, which was done by Foothill Transit. Foothill is in the L.A. region. And it's very interesting because Foothill is the agency which really is the pioneer one to zero-emission with battery electric many years ago, and they thought they will be able to do all their fleet deployment to meet this 100% zero-emission mandate with battery electric. But they realized on some of the routes, they are going to need more battery electric than they are using diesel today, buses, and if they were to use fuel cell electric, they will need the same numbers of vehicle. So as a good example on that route where they have studied, it's a 42-mile roundtrip route and in the daily block of 263 miles. On that particular route, they would need 34 battery electric buses if they want to maintain the same level of service where it will only take 23 fuel cell electric buses. So now if you translate that into the total cost of ownership over a 12-year period, start to see the huge cost difference. Not only you save on the vehicle cost, and actually, the price difference between fuel cell electric and a battery electric vehicle is -- the gap getting smaller and smaller. But as you're selling a number of vehicle, you save on the total cost of the CapEx investment, you save on the infrastructure cost. As you have seen earlier, it takes -- much more expensive to recharge those 34 battery electric especially if you have on-route charging, which has to be installed in city centers at a high cost. But also you save on refurbishment cost. If you want your vehicle to operate 12 or even 14 years, in some case, you will have to replace the battery. That's a significant cost on midlife refurbishment. Where on the fuel cell side, as we're able to refurbish a fuel cell, we don't replace a module, we refurbish our stack, we replace the membrane, we condition the stack. It's a much lower cost of ownership for the fleet user. As a difference on this case over the 12-year lifetime, the operator, Foothill Transit will save $13 million by using fuel cell electric bus compared to battery electric bus. So all the agencies today across California are doing that study. They need to provide a plan to the ARB this year for the smaller transit agency in the next 2 years, for the -- sorry, this year for the larger transit agency and in the next 2 years for the smaller transit agencies. And as we start to see those plans coming in and they are all available on the ARB website, we can start to see a trend that at least a minimum of 30% of the zero-emission buses deployed in California will be using hydrogen as a fuel and fuel cell technology. This number is probably going to go higher as more agency are forming -- coming with a plan and are looking at how are they going to meet the mandate. I'd like to highlight one really good example here that we see in the graph here is OCTA, Orange County, which is planning to deploy a very high number of fuel cell electric buses. Orange County is one of the largest transit agency in California. They operate more than 500 buses. And the plan is showing that for the fixed route, they're going to use 100% fuel cell electric buses. The reason for that is not only fuel cell electric buses shows to be slightly a lower cost of ownership for the overall fleet, but they are the only buses we can meet today the range requirement and we can meet the operational requirement of OCTA. So that's a very important requirement for them to be able to operate the buses on the route that they have. Another example I'd like to use is SunLine Transit. We have seen earlier today the video from the CEO, Lauren Skiver. SunLine has been one, along with AC Transit, one of the agency, which have been operating fuel cell electric buses for a long time. SunLine has buses since 2000. For the past 20 years, they have been operating fuel cell electric buses, most of them powered by Ballard. Today, they have 16 vehicles on the road, which are operating every day in a very tough environment. The Coachella Valley is probably one of the hottest part of the United States. So the bus has to made it to very tough condition, operating on a highway, very hot temperature, a lot of days of the year temperature exceed 100 degree Fahrenheit. So not only you need energy to move the vehicle, but also you need energy to keep the vehicle cold, and you need to be able to provide this comfort to the passengers. So fuel cell and hydrogen not only enable to deliver the range, but also provide enough energy so the vehicle can stay cool on a hot day in the Coachella Valley or stay warm in colder days in some other parts of the United States. What I would like to do now is to switch a little bit and talk about trucks. And what is happening on trucks in California. So as of June 2020, the ARB has issued the Advanced Clean Truck regulation. With this regulation starting in 2024, there will be requirement for OEMs to start having minimum sales of zero-emission trucks, starting from Class 2, all the way to Class 8 tractor trailers. By 2035, there'll be a significant percentage of those vehicles will have to be zero-emission. Up to 55% of the Class 2 and 3, 75% from Class 4 to 8 straight truck and 40% of the truck trailer -- tractors. But by 2045, 100% of the heavy-duty commercial trucks in California will have to be zero-emission. This represents roughly quantity of 300,000 trucks sold by 2035. And this give an idea of a market size of $7.5 billion for the engine market. But California is not alone here. It's leading the way and signed a joint MOU with other 14 states. And those states have committed to promote and push to do everything they can to have 30% of all new medium- and heavy-duty trucks being zero-emission by 2030 and 100% by 2050. So we'll see more and more fuel cell truck being deployed in California and hopefully in other states. So what are we doing at Ballard today? We are working with the numbers of industry leaders in order to integrate, demonstrate the operation of fuel cell module inside of trucks to work with vehicle OEM, system integrator, fleet operators for them to get familiar with the operation of a fuel cell truck, the maintenance of the fuel cell trucks. We have, for example, as Rob mentioned earlier, a Class 8 drayage truck in operation in the port of L.A. The truck was integrated with the BAE power drive, electric drive and in Kenworth truck. We are developing numbers of Class 6 that you can see on this picture here, truck for UPS and another 5 Class 7 trucks, which are going to be in operation also by UPS in California next year. We're also putting trucks on a port like those yard trucks with the REV Group capacity. And this give us a lot of information in order to develop the next generation of our fuel cell truck product as well as forge strong partnership with system integrators and truck OEM in order to deliver the best product in the future and drive this cost reduction to provide the operators with a competitive total cost of ownership. So we strongly believe that Ballard is very well positioned to support the deployment of heavy-duty mobility in California, not only with bus and trucks, as you have seen today, but also with rail. The first hydrogen rail project has been announced in California. There are numbers of marine, ferry, barges, push boats, which are being developed currently in the state. But also, we strongly believe that California has continued to lead the way because of its resource of renewable energy. With declining cost of solar and wind, renewable energy, this opens a route to affordable, available, green hydrogen in order to fuel mobility, clean mobility in California, but not only, green hydrogen will be used in distributed power generation, micro grid application and backup power. The recent event or current event in California with wildfires and a lot of natural disaster result of climate change is really putting a stress on infrastructure. So today, resilience is becoming a very important topic in California, but also in other states and across the world. We need to have better resilience on our grid, on our critical infrastructure. Therefore, looking at alternative solution to power those critical infrastructure, telecommunication network, data centers or grid -- local grid is very important. We strongly believe that hydrogen and fuel cell technology will have a key role to play to provide power generation, energy storage and backup power for those sites. So California is leading the way. California is also presenting a showcase for other states, and we start to see other states joining what's happening in the Midwest, in Ohio, with deployment of fuel cell buses. In Nevada, with Las Vegas joining the cities which are going to be deploying fuel cell electric buses and you see also growing interest in Oregon, Washington State, Colorado, which are also going to be deploying future electric vehicle. So California is showing the way, and we lead a hydrogen economy deployment across the United States. Thank you.

So great. Thanks very much, Nicolas, and thanks to other speakers. We're going to pause just to take a couple of questions for this group before we move on. [Operator Instructions] So we have a couple of questions around China. I think Alfred has taken us through much of the policy, but we've had a couple of tougher questions. Alfred, I know you're ready for them. But one of them obviously is the opportunity in China is huge, I think we all acknowledge that. But I was wondering if you could comment on the competitive landscape and how you see Ballard and the Ballard -- the Weichai-Ballard joint venture staying ahead of the competition? And now Randy is up on the panel as well. And Randy, you may want to comment as well. So perhaps you could go first and comment on how you see the competitive landscape in China.

Yes. I think the -- we are seeing a number of companies -- new companies that are entering into this space that we haven't seen before. So with the local support that we expect through this policy, the level of competition will increase, and we expect it to increase. But nonetheless, I think the platform that we have with Weichai, I do strongly believe that is the best platform, that is going to be the premium platform for fuel cells going forward. We've got a great team there that's working into -- in developing fit-for-market products that's really going to cover the necessary requirements for localization. We're working with downstream OEMs to look at fitting products into trucks. So while I do feel that competition is coming in and it will becoming more furious than in the past 4 years, we are in a good position.

Randy, did you want to add any color?

Sure. Yes. I mean I think Alfred has captured it well. When you look at the platform we have with technology, with products, with market reach and now the Weichai-Ballard joint venture commissioned and ready for scaling, I think there are 2 important factors going forward. One is cost reduction. You're going to hear a lot today about the cost reduction plan we have at Ballard that will also filter into the Weichai-Ballard joint venture. And I think the other thing that's important, Alfred touched on this very powerfully earlier is the fact that the subsidy regime or the new regime that we're looking at moving forward for fuel cell support in China has certain requirements and whether it's localization requirements, technical requirements or strong contributors, strong players, we're checking all of those boxes. So we feel very well positioned in the largest market, not just for fuel cell vehicles, but the largest market for commercial vehicles globally.

Great. Thanks, Randy. Thanks, Alfred. We've had a number of questions on the marine market opportunity. I know we've talked -- has been noted quite a bit about bus and truck in terms of the near-term markets. We're -- we talked -- you saw the video, of course. We're fortunate, by the way, Jesper Themsen, who was the President of Ballard Power Systems in Europe has reminded me, he also has a master's degree in marine propulsion. So I think, Jesper, you'd be eminently qualified to handle these questions. One is just in terms of the opportunity that you see in Europe around fuel cells. If you could just comment on how fuel cell -- where fuel cells and batteries have a role to play in the marine market. And the second question is about timing. You mentioned that we're working on a number of early-stage projects. And there are a number of initiatives going on. But if you could comment on your view on just how quickly you think the marine market will accelerate in Europe and globally?

Okay. Thank you, Tony. Good question. I would say, looking into the future is always difficult. But starting with the comparison between fuel cells and batteries. Batteries, that's kind of a storage technology. Battery is good for short distances. So if you have a ship going short distances between charging points and you have enough time for charging, that's basically where you should use batteries. When you go for longer distances, when you go for more payloads, that's where fuel cells will have its competitive advantage. So we see at the moment that the marine markets, at least for inland and coastal areas, that will be split between batteries and fuel cells, where there are zero-emission requirement. That goes back to -- neither of these technologies are today competing directly head-to-head with diesel engines because there is a price premium for the new zero-emission technologies so far. So then the big question is on timing. When will batteries and fuel cells be competing directly head-to-head on cost with diesel? And should they, because it's a zero-emission technology. That's difficult to really predict. But we see a big interest in the market today, pointing in that direction that this is the future technology, one of the future technologies for ship propulsion.

Great. Thank you, Jesper. Just a couple more questions. One for Nicolas. California, clearly, as you pointed out, is a market leader. And you did touch briefly on some of the other markets in the U.S. So just wondering if you could provide your perspective on the U.S. market outside of California, where some of the key markets or key states would be and how quickly you think some of those might move to adopt fuel cells. And you touched on a couple and perhaps Rob may want to pile on as well.

It's a really good question. We start to see a start in California, but we will start to see, I think, initially probably on the west, there's 2, I think, pool of growth is in the west of the country. I mentioned Colorado, in Nevada, in Washington State and Oregon. A lot of initiatives looking at the production of green hydrogen also. But also these -- our activities in the Northeast. There have been a deployment of fuel cell electric vehicle in the Northeast corridor as well as in the Midwest. Midwest is also the home of the automotive industry in North America. We start to see the OEMs in region, developing fuel cell electric vehicle and investing in the technology development as well as we still have to see the deployment of vehicle. Ohio has been leading in Midwest in the deployment of fuel cell electric buses. Soon there will be this vehicle -- fuel cell buses in Michigan. And we are working with New Flyer to put very soon fuel electric vehicle in Illinois. So we start to see the Midwest also another area. But also don't want to forget about Canada. We start to see now some growing interest in Canada. The Canadian government has released -- is going to release very soon the hydrogen and fuel cell strategy, and the numbers of cities across Canada are looking at the deployment of fuel cell electric buses.

Great. Thanks very much, Nicolas. Randy, do you want to add a couple of comments?

Yes. I think one interesting thing. It doesn't matter if you're looking at rail in China or marine in Europe or drayage trucks in the Port of Long Beach. One of the interesting themes that we've seen emerging is what we call multi-modal applications. So we have, for example, fuel cell -- hydrogen production, first of all, centralized, let's say, at a port. And the ability to use that hydrogen refueling infrastructure for a variety of applications. So like forklifts at the port, like drayage trucks at the port, like rail and marine applications there. So increasingly, I think we're also going to see -- and we're seeing signs of this in the U.S. As well and I think we'll see this globally, this multi-mode applications and leverage off of your hydrogen refueling infrastructure.

Rob, do you want to?

Yes. Just a final supplement. We have to remember, the one key thing we need is low-cost green hydrogen. And United States in the Southwest has tremendous renewable energy resources as well as tremendous capacity to produce hydrogen. And so I see already some of the lowest cost of electrical production from renewables in the Southwest. So my prediction is that Southwest will lead the market in the United States, but it will be an example for other regions that can then start deep integration of renewables, whether it's hydro, power, wind power or solar power or carbon sequestration, as I mentioned, to come up with the fuel supply. And that the market with that development is ready to go, it will be nicely synchronized. So I see a great spreading of the technology.

Great. Just 2 last questions. And one is we haven't talked today about backup power much at all. But Nicolas, you did touch on California. And we did have a question here about -- and we talked about this for the last several years about why in the U.S., particularly, they've been so slow to pick up fuel cell backup power, particularly for the 72-hour generally particularly in California. Have you any comments or any observations on what's taking place in that market?

I think it's changing. I think what we are seeing -- the disastrous events we have seen in California at the moment is really helping people to realize that we need resilience. We need extended backup power that -- yes, backup is an insurance policy. So when everything is good, you maybe don't want to have this insurance policy. But as we realize that our infrastructure has threat that communication will disturb, that today in California, utility company have to shut down the grid in order to avoid more wildfires. There need to be backup power, there need to be a solution, which are going to provide communities and critical infrastructure with continuous power generation. And this is where hydrogen fuel cell really start to be today a very, very interesting solution as a backup to the grid. And the -- we'll see very soon some announcement by major players in order -- how are they going to start deploying a backup for data centers and at a larger scale in order to protect those assets. So I think it took a while. The energy is working, has been proven for a long time. But I think sometimes it just needs a bit of more urgency to drive the deployment.

Great. Thanks, Nicolas. Rob, did you want to add a comment as well?

Yes. So we're all aware that there's a tremendous transition going on in the marketplace in the utility sector with renewables and energy storage. Backup power in terms of megawatt backup power will be one area where the renewable energy can be deployed to give that grid stability. But the overall subject of energy storage is now being addressed with primarily battery technology. When we get to larger amounts of energy, it's just not practical. And this is where hydrogen has a new opportunity to fill the economic solution to enable greater use of renewable energy in the market, provide the stability to the grid and do it in a cost-effective way. So that is another emerging market. And as Nicolas mentioned, we're very active in this sector as well. We've got years of experience and more on that to come. Thank you.

Great. Thank you. So time for one last question, and it's a tough one, and it's not a good idea to ask your boss to answer the tough question. But Randy, I know you've addressed this on investor calls in the past, but we've had a couple of questions around the Weichai JV and the thought process around the IPO. So I know you've addressed this before. So maybe it's not a tough question because you've thought about this, but I'll let you have that one.

Sure. And I think the important thing to understand is as we entered into a collaboration with Weichai, we're really thinking about a long-term relationship here. And as we went through the diligence process with Weichai, one of the things that really reinforces for us was their questions about what will the technology look like 5 years from now and 10 years from now? So we really wanted to have a structure and a plan to attack the large China market for the long term. And our joint venture with Weichai, where we own 49%, Weichai owns 51%, we're looking at ways to effectively transition value from the joint venture to the benefit of Ballard shareholders over the long term. So obviously, we have revenue streams, for example, while we're selling MEAs to Weichai-Ballard joint venture. But longer term, what we're looking at is EBITDA contribution, so a 49% pickup of our EBITDA from the JV as it transitions from commissioning to early adoption to scaling over the next number of years. And then importantly, how do we crystallize some of the value embedded in that Weichai-Ballard 49% ownership that we have. And so Weichai has done this very effectively with a number of other companies where they've IPO'ed and effectively spun out a portion of those business for public shareholders to participate in. So my contention, I've said this very often, I believe there's a lot of value in our ownership interest in Weichai-Ballard joint venture that isn't necessarily reflected yet in the Ballard valuation. And if and when that vehicle was to be taken public, that would be a very effective way for us to basically unlock a lot of that embedded value.

Great. Thanks, Randy, and that brings us to the end of the questions that we have. [Operator Instructions] So we're going to shift gears a bit right now and move to our panel discussion. And I'll introduce them briefly and then and Guy McAree as well. So again, I mentioned them earlier on, we have a number of key and very, I'll say, highly regarded panelists, particularly in the hydrogen space, a number of them have been authors of a number of documents that we've referred to. And so Guy McAree, our Director of Investor Relations, will moderate the panel. And again, the folks that we have today are Dr. Ken DeWoskin, a senior adviser to Deloitte; Dr. David Hart, Director of E4tech Consulting; and Bernd Heid, Senior Partner and McKinsey & Company. Guy, over to you.

Great. Thanks so much, Tony. And welcome to everybody that's watching. We have a very large turnout. Obviously, a lot of interested investors and potential investors interested in the fuel cell industry. When we thought about the agenda for today, we wanted to make sure that we covered lots of important information, and we think interesting information that we thought everyone would want to see. And also to give you a chance to see some of the senior folks at the company and get a sense for the quality of individuals we have here at the company. But we also wanted to give an opportunity for some third-party experts to voice their opinions on important issues related to fuel cell adoption, in particular, the fuel cell value proposition and competitive positioning as we move forward. So as Tony noted, we've got 3 preeminent individuals here who have a tremendous amount of insight, I think, and important background that they can offer over the next little while as we have a conversation with them. I think maybe the first thing to do is just to go around the table and have each of them kind of introduce themselves, provide a little bit of information on their professional background for those who aren't familiar with who they are and maybe also identify where you're calling in from. We've got people calling in today on our Analyst Day from all sorts of different locations around the globe. So maybe starting with you, David Hart. Could you just spend a few minutes and provide a little background?

Happy to. So thank you very much, Guy. Thank you for the invitation to participate. I'm talking to you from a hotel room in Stuttgart in Germany where I am attending the f-cell conference, which is one of the very few real physical conferences that I've been able to attend in the last 6 months. Very happy to be doing that. My background is in mechanical engineering. I ran a research group at Imperial College, looking at hydrogen energy systems and fuel cells for a number of years. And more recently, as you say, I've been the Director of E4tech since 2001. We work across the hydrogen and fuel cell space as well as in biofuels and in batteries and in many other areas of sustainable energy. But I've been doing hydrogen and fuel cell things for 25 years and very excited to see the current really strong growth in the industry and the platform, I think, for moving ahead.

Thanks very much, David. Bernd Heid is a senior partner at McKinsey & Company. Hello Bernd, could you provide a little bit of an introduction on yourself and where you're calling in from?

Thank you, Guy, for the introduction, and also thank you for having me here. My name is Bernd Heid I'm a senior partner at McKinsey & Company. I call in out of Cologne, Germany. I lead our global hydrogen activities. And I've been in that space now for over a decade. And I must say that probably most of that time, it felt like swimming against the current. I also lead our relationship group that is called Hydrogen Council. That's a CEO-led initiative of players along the value chain in hydrogen and have been in the position to co-author several of the reports that we published with members of the Hydrogen Council on the demand outlook of the sector and also most recently, a cost perspective on the full value chain. I'm very pleased to be here with you.